Mexico Temporarily Cancels Sugar Export Permits to US

Mexico said on Wednesday that it has canceled existing sugar export permits to the US to avoid penalties in a dispute over the pace of shipments, a document seen by Reuters said, partly blaming the issue on unfilled positions at the US Department of Commerce.

It was not immediately clear what impact the cancelation would have on exports to the US. The document, sent by Mexico’s sugar chamber to mills on Monday, said existing permits would be reissued in April.

Mexico’s sugar mills are currently in full swing at the height of the harvest. The amount of sugar sent to the US varies from season to season, with the document referring to a quota of 820,000 tons in 2016/2017.

Ties between the US and Mexico have frayed under President Donald Trump, who sees trade skewed to favor the southern neighbor and is seeking to renegotiate the North American Free Trade Agreement.

The document made no suggestion that the present dispute was related to the wider politics, but described as “absurd” an interpretation by “low-level” Commerce Department officials of a clause in so-called suspension agreements, which have regulated the sugar trade between both countries since the end of 2014.

While Mexico’s interests remain aligned with a continuation of trade with the US, Trump’s unconstructive rhetoric has made it harder to create any kind of win-win framework.